On Wednesday, Governor Murphy signed into law S-1889, which prohibits government dealings with businesses associated with Belarus and Russia. P.L. 2022, c. 3 took effect immediately on March 9, 2022, and will expire upon the revocation of the federal sanctions contained in President Biden's Executive Order 14024.
The law requires the Department of Treasury to develop a list of persons it determines to be engaged in prohibited activities in Russia and Belarus and update the list on a rolling basis. The Department will be required to notify any person on the list and provide them with an opportunity to prove that they are not engaged in prohibited activity with Russia and Belarus.
Any person on the Department of Treasury's list is prohibited from being awarded a municipal property tax abatement, or making or entering into a payment in lieu of property tax agreement; applying for or receiving a tax clearance certificate from the Division of Taxation; being certified by as an urban renewal entity for purposes of the "Long Term Tax Exemption Law;" or being designated as a redeveloper by a public agency for the purposes of the "Local Redevelopment and Housing Law." Those listed will also be prohibited from filing or renewing a Public Works Contractor Registration; contracting with State agencies; or receiving an economic development subsidy from the Economic Development Authority.
Local units and State agencies must require a person seeking to engage in one of the activities listed above to certify that they are not identified on the Department of Treasury's list before the contract is awarded, renewed, amended, or extended, or before applying for certification as an urban renewal entity of designated redeveloper. The certification must be executed on behalf of the applicable person by an authorized officer or representative. If a person is unable to make the certification because they or one of their parents, subsidiaries, or affiliates has engaged in prohibited activity, they must provide the local unit or state agency prior to the deadline for delivery of the certification, a detailed and precise description of such activities, such description to be provided under penalty of perjury. The law also makes the certification a disclosable public record. In addition, the law provides for penalties for falsifying certification.
In regards to the application and impact on the Local Public Contracts Law, a local contracting unit must implement and comply with the provisions of this new law, except that the contracting unit must rely on the Department of Treasury's list. The local contracting unit must notify the New Jersey Attorney General with the name of any person or entity that has submitted a false certification for civil action in the matter. The local contracting unit may also report false certification to the municipal attorney or county counsel, as appropriate, to bring civil action against the person.
Finally, local contracting units, boards of education, state colleges, county colleges, or the State are prohibited from banking with, having or holding stock, debt, or other equity investments of, or maintaining insurance coverage through a policy issued by a financial institution included on the Department of Treasury's list. In addition, the State is prohibited from investing pension or annuity funds in a company owned or controlled by the government of Russia or Belarus.
The law defines "engaged in prohibited activities in Russia or Belarus" as (1) companies in which the Government of Russia or Belarus has any direct equity share; (2) having any business operations commencing after the effective date of this act that involve contracts with or the provision of goods or services to the Government of Russia or Belarus; (3) being headquartered in Russia or having its principal place of business in Russia or Belarus, or (4) supporting, assisting or facilitating the government of Russia or Belarus in their campaigns to invade the sovereign country of Ukraine, either through in-kind support or for profit.
The provisions of P.L. 2022, c. 3 will not apply in circumstances when their application would violate federal law or regulation or be inconsistent with the terms and conditions of federal funding.
We suggest you review this new law with your administrator, municipal attorney, chief financial officer, and purchasing agent to determine the impact on your municipality.
Contact: Lori Buckelew, Assistant Executive Director, firstname.lastname@example.org, 609-695-3481, x112.